347 comments

Why I Put My Last $100,000 into Betterment

bettermentlogoI’ve always been a do-it-yourself investor. This habit started around age 19 with a series of ridiculous speculative trades in individual high-tech company stocks. “This stock is sure to go through the roof”, I would think, “because their products are so great.”

This is a terrible way to invest.

But after a few early financial haircuts and the subsequent 20 years of reading an investment book or two every year, I’ve come to appreciate the much more boring and successful strategy of extremely long-term investing in extremely low cost index funds. Nowadays, I don’t just avoid trying to guess the short-term movements of individual stocks. I avoid looking at financial markets and news entirely, for weeks or months at a time.

This is a much better way to invest. In fact, doing just this will not only put you ahead of most average Joes, but you will also beat the vast majority of expensive personal financial advisers and professional investors as well. The reason is simply that you minimize the main sources of potential loss: human error and our flawed boom-bust psychology, fund fees, capital gains taxes, and broker commissions.

If we were to put a wide range of popular investing styles on a spectrum of effectiveness, it might look something like this:

Fig. 1: A few asset types with expected annual return after inflation.

Fig. 1: A few asset types with expected annual return after inflation.

You can see that we’re already up near the top of the chart. You can improve slightly on buy-and-hold-forever investing, but at this point it starts to take some work. To really beat it, you need to be a lifelong business prodigy who devours financial statements and human psychology in equal parts for most of your lifetime. (Note that most of us currently feel like stock geniuses because of the recent 20% annual gains in the overall market, but this all tends to average out over the decades and in reality you’ll do well to get 7% after inflation.)

vanguardFor almost 40 years, Vanguard has been the place* to invest to get these high-on-the-chart results. As a member-owned firm, they have patiently operated with maximum integrity** and zero bullshit salesmanship while most financial firms leveraged, hedged, churned and charged their clients to maximize their own profits. I started my own Vanguard account in 1999 and have never looked back as multiple recessions and crises, booms and dividends have helped my small militia of green employees expand their ranks by hundreds of thousands of dollars.

But in recent years, technology and the latest startup company boom have brought new options for index fund investing. ETFs have delivered even lower expenses, easier transactions, and allowed Vanguard-like options to spread to Canada and European countries. Lightweight wealth managers like Future Advisor, Wealthfront, and Personal Capital deliver their own takes on index investing, with more service than Vanguard in exchange for moderate cost. Then there is Betterment, which appeared on my radar when I discovered some financially savvy friends were entrusting the company with big chunks of their wealth (Jesse Mecham and the Mad Fientist among them).

So Why did I Pick Betterment?

bettermentIn two words, technology and psychology are what attracted me to this company. At the core, Betterment is just a fancy frontend for Vanguard funds – when you invest with Betterment, you end up owning Vanguard funds just like a wise person would already do. But they add value by automating two things that actually allow you to earn and keep more money: automatic portfolio rebalancing, and tax loss harvesting. They do this for a fee that amounts to roughly $150 per $100,000 invested. I expect the benefits to be substantially greater than that, meaning it should prove to be a profitable choice if I have done the homework right.

On top of that, their mobile and web-based interface make contributing and watching your growing ‘stash a lot of fun, which is a big part of the battle. But your interaction with the company remains in the digital realm – no adviser will be making personal calls to offer hand-holding and warm guidance. This works well for my typical engineer’s personality – I answer the phone for my mother, my wife, and a few close pals. The rest of the world can send me an email or put their information on a website. I’ll go read your site if I want your information, thanks very much.

What is Rebalancing and Tax Loss Harvesting Anyway?

Rebalancing means maintaining your original mix of stocks, bonds and other bits of the world economy in a strategic proportion. If one class goes up while another goes down, the system automatically sells a small portion of the winners and/or buys more of the discounted assets. On average this amounts to systematically buying low and selling high, which improves your returns slightly over the years, as explained in my older post on Asset Allocation.

In the normal course of all this rebalancing, Betterment will end up selling some index fund shares for you at a profit, which means capital gains taxes. This can be cleverly offset by selling other funds that have lost money in the same year, but then using that money to buy other funds that still allow you to own those same companies. This is called Tax Loss Harvesting.

You can’t do this trick by just selling and re-buying the same stock in the last week of every December: that is called a “wash sale” and the IRS disallows it. But with today’s wealth of interchangeable funds and within the whole scheme of automatic asset allocation, it is a perfectly valid strategy that Betterment estimates could improve the performance of a non-retirement account by about 0.77% annually, which is again several times the fee they charge.

The Experience of Betterment

Shortly after becoming convinced of the benefits, I had the unexpected good fortune of meeting with a crew of Betterment workers, including co-founder Jon Stein. Over dinner I was pleased to absorb the realness of the company culture – technical and pragmatic, and completely free of the stuffed-shirt hype that has been pervasive in most of my peeks into the financial services industry. They answered every question I could throw at them, and then lent me one of their engineers to handle any follow-up technical questions that might come up in further research.

At last I decided to take the plunge, and I signed up for an account just as any new customer would do. The reassuring simplicity of it was a joy. I did the basic account setup, linked in the checking account, and within a day I was able to transfer the last $100,000 of leftover cash from my recent house sale into productive investments where it should be.

What I Bought

Betterment is designed to make things simple for you, even while they do some pretty sophisticated management in the background. They start with a brief questionnaire on how long until you retire, and your financial goals. In the end, this translates to a ratio of stocks to bonds, and people closer to retirement get more bonds because stability is often preferred over the higher returns of stocks.

However, I retired 10 years ago and I still don’t care at all about stability, because we have sufficient safety margin to allow (and even benefit from) greater volatility. So I overrode the system and selected “90% stocks, 10% bonds”. The portfolio ended up like this:

portfolio

My $100k Betterment portfolio (which has since drifted up to $105k) is balanced across 10 Vanguard funds.

 

A Slew of Educational Emails

An unexpected benefit of the process has been enrollment in what I would call “Betterment University”. Since starting the account I have received no fewer than fifteen emails from the company’s system, nicely timed to be easily digestible in my limited email schedule. Some of them were just status updates: “Congratulations on funding your account / Your pricing plan has been upgraded”, etc. But others were concise tutorials on investing itself: “Explore Betterment’s historical performance / Why market timing is even more dangerous than you think / How we use dividends to keep your tax bill low.”

Vanguard does the same thing to an extent, but they tend to focus on drawn-out webinars and the presentation is less approachable. I look at Betterment as being a service to get started, plunge straight into top-tier investing, and then learn about what you’re doing in the coming months after you’ve already done it. For the typical beginner with no idea where to start, this can be an ideal approach since fear of starting often keeps many of us in savings accounts for far too long.

Where To Go From Here

I’m excited to watch this investment carefully over the coming years. While I’m not expecting magical performance, I do expect Betterment’s simple but worthwhile automated management to outperform my own overly complacent investing style, and to more than pay for the company’s fees. Much like this blog’s Lending Club Experiment (now well past the two year mark), I’ll set up a dedicated page where we can keep track of things in detail and compare Betterment results after fees to my default investment, which would have a two lump-sum purchase of Vanguard’s Total Stock Index(VTSAX) and Total International (VTIAX) funds.

Update: I have now set up this page, and you’ll find it here:
The Betterment Experiment – Results

As always, you are welcome to follow along with your own investment. If you do so with the banner below, this blog will not receive a commission but it will help the company learn how many customers came from this site.

But even if you aren’t ready to invest at this time or need a few more opinions, I would suggest that the service could provide value to almost any US-based Mustachian. Put it onto your list of things to research further – I’m glad I did.

 

Note: To be clear on the background, I did not get paid to write this or any other post, but Betterment does advertise on this site. See the affiliates policy if you’re curious how I handle blog income.

Footnotes:

* in the US, anyway. Luckily they have finally reached Canada – learn more in Mr. Frugal Toque’s article on Canadian Investing. And in the UK, where you can get great education and investing knowledge by reading anything from my friend The Monevator.

** In fact. Vanguard founder John Bogle has done so much in his long career for the individual investor and for business ethics as a whole that he is up for a presidential medal of freedom. I’d say he is a good candidate. You can read more about it in this story on Jim Collins’ site. I also wrote a bit about Mr. Bogle in the article called “Enough”.

 

  • Paul December 9, 2014, 9:20 am

    So, I just signed up to make a small investment every month to try to build up a little savings in anticipation for my kids’ days in college. (My daughter ran the financial aid calculator for Harvard, and it showed that, at our income, our expected parental contribution would be $0, and if she goes to St. John’s, where my wife and I work, here tuition would be free, so we aren’t that worried, but it would still be nice to have a chunk of money).

    My question is, how is an investment in something like Betterment reflected in taxes. Do they send a simple tax statement that is simple to enter into something like Turbo Tax? (I don’t think Turbo Tax, in itself, is Mustachian, but I fell into the habit of using it years ago). We’ve never invested in anything beyond retirement, (where we have about $120,000), and all my focus has been in paying off our house, which we did this summer.

    Investing in anything is a new deal for me. Taxes have always flummoxed me, (hence the Turbo Tax).

    Reply
  • RH December 12, 2014, 11:10 am

    WHOA, the performance of Betterment allocations YTD are well below the S&P 500. This info is according to their website. S&P shows as 12% YTD and the Betterment 80%stock/20% bond comes in as 3.7%. That is a drastic different and I’ll probably close my betterment account based on this. Again, this info is from their site when I click the ‘Performance’ tab and they have a nice chart that compares the performance of everything.

    Reply
    • Antonius Momac December 17, 2014, 8:19 pm

      RH,

      Yes. I have had that experience. Except with real money. Not very good. At least I can say it was better than saving, but I wish that I experimented with 1000 only.

      I just hope that MMM keeps us posted and lets us know what he thinks when he pulls his money out. I don’t much like the idea of paying for much worse returns than a straight index fund. Maybe with that performance its really easy to harvest losing stock for those tax benefits…

      -I wonder?

      Reply
    • Jason Beck March 20, 2015, 8:21 am

      Only time will tell (past results is not indicative or future performance.)

      But the theory is that they balance global and US stocks… global stocks are 8% lower now then they were at their peak last July. Because of their heavy global weighting, you very much could have stayed even or lost money in the past year. However, if you’re depositing regularly, you’re buying a higher quantity of cheaper global stocks right now. Over a longer time period, you’ll almost certainly see the global economy rebound, and see large gains.

      Reply
  • JRM December 16, 2014, 1:25 pm

    There is a big problem with this strategy. 1, you are basically going all in at the near top of an overvalued market. Where is your other 100K to average in when the market sells off for months, or years. Your 105K now will very likely be 50K in a year or two. That is great, IF you have more money to buy in more. These funds are great in bull markets, but to really make great returns you need to play the short side as well.

    Reply
  • Daniel January 8, 2015, 1:16 pm

    Put about 180k into Betterment last April – as of today I’m at 177k… Have 140k in a 90/10 split which is down ~$2800 and 40k in 70/30 which is down a few hundred bucks. Very disappointed to say the least. There are 11k in harvested tax losses though, so that’s something I guess.

    Reply
  • Dan February 12, 2015, 12:35 am

    Hello all,
    Which is the best platform (as close as betterment as possible) that can be used by non Us residents? I am a german resident.

    Reply
  • Ben March 10, 2015, 4:55 pm

    Beauty article… learning a shit ton from your site so far. Sucks that Betterment isn’t available up North here… At least Vanguard is. I have a TFSA account (one of) I started with a financial adviser buddy that I’ll convert to a Vanguard fund shortly.

    Reply
  • Potato Peanute March 17, 2015, 4:50 pm

    Are there any advantages to using Betterment over Target Date Funds for tax sheltered accounts?

    Reply
    • Antonius Momac March 19, 2015, 3:58 pm

      For Betterment (80/20), Sept 2013 – Oct 3, 2014 with a withdraw on that date. I received 2.8 % return, as per their site performance calculation.
      With Vanguard 2040 target date retirement it was 16.41%

      So Betterment investing was 13% worst by those figures.

      Reply
  • Mr. Michael March 22, 2015, 6:54 am

    These two questions were asked earlier in the comments but went unanswered:

    Is tax gain harvesting an option? If I end up in a low bracket can I set the algorithm up to fill up my 15% tax bracket with long term capital gains instead the opposite? If not, that would be great feature to add, maybe to be offered in December when people have a good sense of their annual income.

    How easy and costly is it to leave Betterment if the management fees go up? Is there a cost to transfer out? Can it be done without triggering massive capital gains? I’m a bit worried that the current low fee structure won’t always be there, nor will I have the opportunity to leave.

    Reply
  • Brian March 28, 2015, 7:23 pm

    MMM, quick question about tax-loss harvesting… Does that also apply to IRA accounts? For instance, let’s say I had the required minimum in my Roth IRA at Betterment to qualify (which I don’t currently). Will tax-loss harvesting matter at all? What I read elsewhere regarding IRAs seems to comprise conflicting information. Thanks!

    PS. Have you read MONEY: Master the Game by Tony Robbins? I’ve been rethinking my asset allocation as I read it, and that’s how came across this post.

    Reply
  • Ryan April 13, 2015, 11:00 am

    Mr Money Mustache,

    Thanks for sharing this article. Great read. I am 26 and have never and will never have a loan (other than a possible mortgage if I don’t build my own house and decide to buy). I always knew that saving was important, but I never knew how to save properly. You would thik that this would be taught at all universities. Anyway, I started reading your blog 1 week ago and I have already read almost every post. I did some math about how much I would save (and how much it will be worth in 30 years) if I just ride my to my softball games for the next 5 years. It’s crazy!

    Ok, on to my question. I actually opened a WiseBanyan.com account last week. I am sure you have heard of it, but If not, it is similar to Betterment.com however it has no fees. The only thing it lacks is free Tax Loss Harvesting. However, if you refer three people to the site, that is free too.

    My company doesn’t offer a 401k unfortunately, but I do want to max out my IRA every year ( I don’t have one set up yet). As of now, I have a personal investment account open with WiseBanyan. I also want to open an IRA account with them. For example purposes, let’s say that I have $20,000 to invest right now. I plan to put that $20,000 into my personal investment account and then transfer $5,000 of that on lat day of the tax year to my IRA account. Is there any advantage to putting that $5,000 in the IRA account right now instead of the Personal Investment Account (other than the fact that I won;t touch it)?

    Reply
  • Dennis April 27, 2015, 10:48 am

    I’m in the process of transferring my IRA from Fidelity to Betterment. What a long process it has turned out to be. It seems that Fidelity can hold my money for as long as they want and all I can do is call and complain. I didn’t see this coming. The Betterment website says 7-10 business days for a transfer. The reality is that it’s going to 20 – 25 business days. The truth is that it is 7-10 business days after you managed to pry the money out of the hands of your old provider. It doesn’t get much better on the receiving end. Because Betterments system doesn’t talk to Fidelities, Fidelity is cutting a check and mailing it. Unbelievable! I know my case is not isolated, Betterment told me so. I’m sure that this is not isolated to Betterment and Fidelity either. During this process the investor is powerless to do anything about their money being held. I believe there is systemic fleecing of investors who are trying to transfer from one provider to another and all the old provider has to say is, “it’s in process”. Why isn’t this regulated? Who can I appeal to?

    Reply
  • Marshall McDonald May 3, 2015, 1:01 pm

    I’m curious to know more about the Betterment fee structure for my given situation.

    I’m 31. Lived the New York artist life for a decade and finally coming to terms with the fact that I’ll hopefully live to be old. Time to start saving.

    I’m in the 28% tax bracket.

    Have a Roth IRA through Fidelity – $6k (dumped into it before doing my taxes).
    Have a company sponsored 401k that I’m hoping to max out 60-100% this year. It’s currently empty. Company just opted-in.
    Have 10k in emergency savings fund.
    No debt. Paid off last art school loan recently.

    I’m hoping to spend the next 3-5 years living somewhat frugally and maxing out my Roth and 401k, with a little extra towards a shorter-term investment account.

    I went with Fidelity for the Roth and Investment acct. Already regret.

    My next thought was move to Vanguard. Although I’ve lately heard Vanguard’s customer service for basic things like a rollover has been ugly lately. Not sure what to believe but also kind of irrelevant. Don’t need much help from them with all the resources out there.

    My latest crossroads as of today: Vanguard or Betterment? I’m basing my decision on fees and how to make my money work the hardest for the long term.

    Assuming I get 10k into my Roth by the end of the year, betterment will charge me .25% to manage. That’s in addition to exp. ratios they claim range from .09%-.17% depending on allocation. It’s low, but I feel like I could do a little homework, bypass the .25%, and go straight to Vanguard.

    I *really* love a good dashboard and Fidelity is godawful, but that’s an expensive dashboard 30 years down the line, no?

    Tax loss harvesting seems like a huge advantage, but not very relevant for accounts under the 50k mark (i.e. me for many more years).

    So I’m leaning towards Vanguard. I can find the same low-fee indexed funds there and bypass the extra cost.

    Also worth noting, my IRA is a month old and I’m ready to roll it over. Doesn’t look like there are any added penalties or IRS issues as long as this is the only time this year I move it, but maybe you know something I don’t? I think Fidelity is going to hit me for $50 bucks. Happy to pay if it means I’ll never have to look at that website again.

    Thanks guys.
    Marshall

    Reply
  • Ted Leber May 3, 2015, 5:24 pm

    If readers missed this:
    See Paul Farrell’s Asset Allocation statistics at:
    http://www.marketwatch.com/lazyportfolio
    Site is updated daily, but only a fool would look at it daily :-)

    also for a most useful fee calculator see:
    http://www.401Kfee.com/how-much-are-high-fees-costing you

    Based on everything I know over a 40 year career, fees can easily cost you 50% of your nest egg.

    Not too cheerful, Ted Leber

    Reply
  • Amy July 17, 2015, 10:11 am

    Hi MMM people… I’m just catching up here (late to the party!) and am currently in the process of consolidating a bunch of employee generated retirement accounts into what will amount to about $100k. I started working with Edward Jones to do this and after doing more research I am thinking I might have made a mistake? Can I unring this bell?

    Reply
    • Trifele July 17, 2015, 11:14 am

      Amy — for maximum responses try posting your question on the forum under ‘Ask a Mustachian’. Good luck!

      Reply
  • Ruslan September 8, 2015, 8:42 am

    Are there any auto-advisors like betterment for non-us residents/mustachians? (Russia for example)

    Reply
  • John Hruska November 30, 2015, 6:21 pm

    Hey, thank you for the eye opening article.

    May I ask what type of account you use for investing? Since IRA is limited to $5,5k/year contribution and individual is not protected agains bankruptcy (medical or lost lawsuit or something…)

    thank you

    Reply
  • Anthony January 30, 2016, 7:34 am

    OK – I’ve ditched my my money manager and looking to move to a much simpler life in Vanguard or the equivalent. Most of my investments from the MM are in Equities with some in mutual funds. So my question is – what is the best approach to liquidate and purchase? Sell all and jump in? Sell some, buy some? Any advice is appreciated.

    Thanks,
    Anthony

    Reply
  • Steerpike March 1, 2016, 1:08 pm

    MMM:

    I really like the idea of having a Ben Graham-like approach with some perks like TLH and low expenses. Having said that, when I review the Betterment site, I don’t see any fundamental distinction from the composition of their portfolio and that of a mutual fund. Seems like you get the perks you named, but not the Ben Graham defensive investor approach.

    For a person who is considered an authority on money management, and is widely respected for taking an independent approach to investment, I also think it is fair to question whether it is advisable to recommend financial products/services in which you have a personal financial stake, though your disclosure of that stake is certainly noted and appreciated.

    I have learned much from your site, and hope my comments come across as respectful, for I certainly intend them that way.

    Thanks,

    Brad

    Reply
  • Tre March 17, 2016, 1:04 pm

    Opened a Betterment account in 2014, and very happy with it. They now offer services that I’d like to use, namely to link our external 401k, mortgage, etc to my Betterment account in order to have all financials at a glance. Have you used this service? My only concern is with regard to security. I’ve read some conflicting reviews about Betterment security. Thanks!

    Reply
  • Scott Martin March 31, 2016, 10:28 am

    I am just retired age 62, investments are currently with an adviser charging me 0.8% per year and invested about 50/50 equities and bonds, all indexed funds, Fidelity, for which he gets “better pricing than I can get individually”. Maybe 10-12 different Fidelity funds, most with expenses of around 0.22%. He has me rebalance once a year and does the tax loss harvesting as well. It looks like the ETF’s have expense ratios more like 0.40% or so. I need to do the math to see how that adds up, but if I can save even $10,000 per year by doing my investing through Betterment or Schwab I am thinking of doing that now that I have time to manage it myself. One thing that crosses my mind is that Schwab is a much larger company so maybe it’s safer than Betterment? Or on the other hand, maybe it’s TOO big, with different risks. It’s hard to want to pay an adviser when returns are only 5% anyway.

    Reply
  • Jessica C July 9, 2016, 5:00 pm

    Hello,

    I’m brand new to the site and have been very much absorbed in it the last 24 hours. I am also newly financially savvy (or trying to become that way) and a beginner in the investing world.

    I found this post interesting because I am debating between wealthfront and betterment. I’m leaning towards wealthfront only because I have a lower investment amount (under 10K) and would like that managed for free.

    My big issue though is tax-loss harvesting. TLH seems to be a great advantage but I am very nervous about activating this feature due to the fact I have a 401(k) through my employer and am nervous about the Wash Sale Rule. Does anyone else worry about this? Any thoughts. Help a newbie out please :-)

    Reply
  • Stacking Dollars July 21, 2016, 11:17 am

    This is an interesting field. I can see this making it easier for the layman to just throw money into the account and let Betterment do its thing.

    I personally wouldn’t do this since I see this as another way money leaks out of my pocket and I’m a DIY’er which is stupid easy with index funds.

    I’m not a fan of their international allocations as they haven’t done squat-jack over the last 10 years in which you were better of in bonds with much less volatility. But of course, the next 10 years could be much different.

    The user interface is nice though.

    Reply
  • Jerrod Mason October 9, 2016, 11:08 pm

    With over 170,000 members, they must be moving the markets whenever they advise action. I asked them about this, and whether they are too big to succeed (!), and got a canned nonresponsive reply. Makes me nervous about signing up. Your thoughts?

    Reply
    • Mr. Money Mustache October 10, 2016, 10:31 am

      Hey Jerrod – an interesting question but Betterment is not nearly at a scale where this would be a problem:
      As of 2016, Betterment manages about $5 billion for its customers. On a given day, their trading volume would only be a tiny fraction of this number. Meanwhile, the daily trading volume on the New York Stock Exchange alone is $100-200 billion.

      Even Vanguard, with TRILLIONS under management, is not considered an overly disruptive force – partly because they don’t buy and sell aggressively like a hedge fund might do. The funds of both companies seek to simply accumulate to match the market – with occasional slight rebalancings.

      I hope this helps and sorry you didn’t get a great answer from the company. But remember that with 170,000 customers and only 200 employees or so, Betterment is efficient and affordable precisely because they develop an automated system and a beautiful self-serve library of articles on how things work, rather than taking time to answer every question personally.

      Reply
  • john October 11, 2016, 3:14 pm

    first of all, i just came across your blog and am impressed… thanks for your thoughts/input! i really like the idea of betterment (& their story). i am considering moving over $100k+ to them that is currently at an edward jones account… but i have two concerns: my first concern is that all of the ETF’s they would put the money into are currently at all-time highs (in terms of price/performance). i know it’s not good to try to time the market, but i have a hard time coming to grips with the thought of selling all my current positions to jump into something that is at an all time high. my second concern is around the tax hit of liquidating my current positions at my current brokerage firm. what are your thoughts on these two concerns? thanks in advance for your help!

    Reply
  • Christine November 30, 2016, 1:22 pm

    Hi MMM! Long time reader, big-time fan. Betterment recently introduced a Tax-Coordinated Portfolio, allocating assets across tax-exempt, tax-deferred and taxable accounts, estimating an annualized benefit of between 0.10% and 0.82%. If you try this for your own portfolio, just a humble request for an update on what you think whenever you next update your Betterment page!

    Reply
  • George Seamans January 31, 2017, 7:17 am

    Well looks like Betterment is increasing management fees. I feel like they tricked me into investing over 100,000 and then increased the fees on me. Not such a great way to do business.

    Reply
  • Judy Mize July 9, 2018, 2:46 pm

    Better late than never to the part….

    Wondering if you still feel the same way about Betterment as you did 4 years ago? Looking to transfer an IRA over – that’s a large portion of my retirement. Thoughts?

    Reply
    • Mr. Money Mustache July 9, 2018, 3:10 pm

      Hi Judy, yes I still do. I have my own IRA (leftover from my real work career) 100% in Betterment, plus this $185k “experiment” fund, plus the proceeds of selling a house (now 500k+) in Betterment.

      But the key thing before rolling it over is to make sure you have a reason. Are you currently in a high-fee fund or something actively managed? If so, it’s worth getting out of it. If you are already in an S&P500 or similar Vanguard fund with low expense ratios, there might not be much point.

      Unless you also plan to do taxable investing with Betterment at the same time. When you do this as I do, they can automatically shuffle your allocation so more of the high dividend paying things are in your retirement account, and the non-dividends are in your taxable account. This saves you on taxes every year, while allowing exactly the same portfolio overall. Cool technology!

      Reply
  • Marty July 9, 2018, 11:50 pm

    For Mustachians in Australia, check out clover.com.au – a robo-advisor Down Under.

    We offer automatic rebalancing, socially responsible investing for all portfolios, and the investments are held in the individual’s name. Oh yeah, our minimum investment is only $2,500 and our UX is pretty awesome.

    (I work at Clover).

    Cheers!

    Reply
  • Michael December 5, 2018, 2:18 pm

    Do you still recommend Betterment?

    Thanks!

    Reply

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